Tuesday, November 20, 2012

Qatar faces double-barreled attack as Singapore company moves into the firing line

Qatar’s successful bid to host the 2022 World Cup faces a double-barreled
attack with a decision by world soccer body FIFA to investigate the Gulf state’s
bid, fresh allegations of alleged attempted bribery, and imminent trade union
actions in protest of Qatar’s treatment of foreign workers involved in the
construction of World Cup-related infrastructure.

FIFA’s investigation comes on the back of a decision to
expand its enquiry into bribery charges against its suspended vice-president,
Mohammed Bin Hammam, a Qatari national who has also been suspended as president
of the Asian Football Confederation (AFC), into Mr. Bin Hammam’s financial
management of the Asian soccer body. The enquiry is likely to focus on what an
internal audit conducted by PricewaterhouseCoopers (PwC) describedas his management of an AFC sundry account as
his personal account as well as the negotiation and terms of a $1 billion
master rights agreement with Singapore-based World Sports Group concluded by
the soccer body on Mr. Bin Hammam’s authority.

A Singapore court this week instructed veteran journalist
and soccer scholar James M. Dorsey to reveal his sources for his reporting on
the audit and Mr. Bin Hammam’s relationship with WSG. Mr. Dorsey has not
commented on the ruling.

FIFA made its decision to investigate Qatar public after The
Sunday Times handed over evidence that constituted the basis for its reporting
that the Gulf state had discussed sponsoring to the tune of $1 million a gala
dinner organized by Samson Adamu, the son of Nigerian FIFA executive committee
member Amos Adamu.

Mr. Adamu Sr was banned for three years from involvement in
professional soccer in 2010 in the run-up to the FIFA vote following a Sunday
Times undercover investigation that secretly filmed him offering to sell his
vote on the 2018 World Cup for a payment of $1.3 million into his personal bank
account, which he said he would use to build football pitches in his native
Nigeria.

The newspaper quoted Hassan al-Thawadi, the deputy head and
main spokesman of the Qatari World Cup organizing committee, as confirming
initial negotiations about the sponsorship of the dinner but insisting that
those talks were ultimately broken off after taking FIFA bid rules into
consideration.

Qatar has so far successfully fended off repeated
allegations of wrong doing in its effort to win the World Cup hosting rights
that was far better funded than the bids by its competitors, the United States,
Australia and South Korea.

Qatar faces in addition to the FIFA investigation escalating
action by the International Trade Union Confederation (ITUC) that has 175
million members in 153 countries because of what it describes as inhuman
conditions for foreign workers that violate international labor standards. The
ITUC is expected to make its rejection of Qatari efforts to improve the
material conditions of foreign workers, who account for a majority of the Gulf
state’s population, as insufficient because they do not include recognition of
the right to free association and collective bargaining at a climate change
conference that opens in Doha later this month.

“The Qataris are offering short term conditions that make a
difference but for the international union movement this is not about fixing
bedrooms, It is about freedom of association and the right to collective
bargaining – fundamental rights. When you have trade unions and collective
bargaining all other things get fixed. Work and living conditions are part of collective
bargaining,” said a source familiar with trade union thinking.

The ITUC has launched an online campaign calling for a boycott
of Qatar if it fails to adhere to international labor standards.

Construction industry sources said that Qatar was trying to
fend off the ITUC’s rights demands by ensuring that companies enforce safety
and security standards, pay workers on time and ensuring that they are properly
housed. The sources said Qatar had reduced the number of workers allowed to
live in one room from eight to four and that it was building a compound for the
laborers with modern residential units as well as shops and cinemas.

The FIFA investigation of Qatar intersects with that of Mr.
Bin Hammam given widespread skepticism about Qatari assertions that he was not
involved in the World Cup bid despite the fact that he was the most important
figure in Asian soccer and one of the most important people in world soccer.

Mr. Bin Hammam has repeatedly denied any wrongdoing and has
charged that he is the victim of a vendetta by FIFA president Sepp Blatter,
whom he last year challenged in FIFA presidential elections. Mr. Bin Hammam
withdrew his candidacy after he was accused of seeking to buy the votes of
Caribbean soccer officials.

Sources close to FIFA ethics investigator Michael J. Garcia
described the former US district attorney as a stickler for detail who played
everything by the book. The sources said Mr. Garcia was unlikely to leave a
stone unturned and would therefore look closely at all allegations raised in the
PwC report.

The report, beyond discussing Mr. Bin Hammam’s financial
management of the AFC and negotiation of the WSG contract, raised questions about
two payments totaling $14 million by a WSG shareholder to Mr. Bin Hammam’s AFC
sundry account prior to the signing of the agreement.

The report said that “it is highly unusual for funds
(especially in the amounts detailed here) that appear to be for the benefit of
Mr Hammam personally, to be deposited to an organization’s bank account. In view
of the recent allegations that have surrounded Mr Hammam, it is our view that
there is significant risk that…the AFC may have been used as a vehicle to
launder funds and that the funds have been credited to the former President for
an improper purpose (Money Laundering risk)” or that “the AFC may have been
used as a vehicle to launder the receipt and payment of bribes.”

Mr. Bin Hammam reportedly furnished FIFA investigators in
September with his own independent expert's report from London accountants Smith
and Williamson into the AFC account that was said to include a line-by-line
explanation of all expenditure.

Rather than opting for transparency, WSG has sought to
squash all reporting on its relationship to Mr. Bin Hammam and the AFC with its
legal proceedings against Mr. Dorsey. Its refusal to comment on the PwC report
has been reinforced by the Singapore court decision. In its only comment
publicly available, WSG said in an August 28 letter in which it initially
threatened this reporter with legal action that “PWC are incorrect and
misconceived in suggesting that the MRA (master rights agreement) was
undervalued. They have neither considered the terms of the contract correctly,
the market, nor the circumstances in which it was negotiated.”

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James M DorseyWelcome to The Turbulent World of Middle East Soccer by James M. Dorsey, a senior fellow at Nanyang Technological University’s S. Rajaratnam School of International Studies. Soccer in the Middle East and North Africa is played as much on as off the pitch. Stadiums are a symbol of the battle for political freedom; economic opportunity; ethnic, religious and national identity; and gender rights. Alongside the mosque, the stadium was until the Arab revolt erupted in late 2010 the only alternative public space for venting pent-up anger and frustration. It was the training ground in countries like Egypt and Tunisia where militant fans prepared for a day in which their organization and street battle experience would serve them in the showdown with autocratic rulers. Soccer has its own unique thrill – a high-stakes game of cat and mouse between militants and security forces and a struggle for a trophy grander than the FIFA World Cup: the future of a region. This blog explores the role of soccer at a time of transition from autocratic rule to a more open society. It also features James’s daily political comment on the region’s developments. Contact: incoherentblog@gmail.comView my complete profile